Market Update
US tsys trading lower, 10Y 2.43% (+1.5bps) , above avg volume in TY futures (425k), US equity futures higher, S&P +13. US/China trade tensions moderated somewhat as the US eases some restrictions on Huawei according to WSJ article. Core EGBs lower, 10Y gilt 2bps higher, PM May to unveil new proposal for getting Brexit deal through Parliament. GOCs lower, yields 4-5bps higher in catch-up mode with the US after Cdn mkt close yest. No Cdn data today, March Retail Sales tomorrow (1.2% exp vs 0.8% Feb). On Friday , BOC Poloz said there is still underlying stregth in the Cdn economy and that the natural tendency would be for rates to move higher leading to 1-2bp widening in Can/US by Friday afternoon.
News headlines
S&P Futures Climb With Europe Stocks; Bonds Mixed: Markets Wrap (Bloomberg) U.S. equity futures and European stocks advanced on Tuesday following a mixed session in Asia as the trade-war driven turbulence that has dominated markets this month showed few signs of abating. The dollar strengthened while Treasuries slipped.
TSX futures rise on higher oil prices (Reuters) Stock futures for Canada’s main equity index rose on Tuesday, supported by higher oil prices which gained on escalating tensions between the United States and Iran.
Trump’s Huawei ban raises hopes for Chinese chip suppliers (Reuters) Washington’s blacklisting of technology giant Huawei has taken a toll on U.S. semiconductor shares, but China-listed firms have rallied as investors bet they can gain from Beijing’s stepped-up efforts to build a homegrown supply chain.
China rebuffs Trump claim U.S. tariffs are making firms leave (Reuters) Foreign investors remained enthusiastic about China, the foreign ministry said on Tuesday, following U.S. President Donald Trump’s claim that his tariffs are causing companies to move production away from the world’s second largest economy.
Canadian retaliatory tariffs lifted as U.S. kills steel aluminum penalties (BNN) Canada collected more than $1.27 billion from the retaliatory tariffs on U.S. products over the last year and all of it will go to the Canadian steel and aluminum industry even though the steel trade war with the United States is over.
Top U.S. Tech Companies Begin to Cut Off Vital Huawei Supplies (Bloomberg) The impact of the Trump administration’s threats to choke Huawei Technologies Co. reverberated across the global supply chain on Monday, hitting some of the biggest component-makers.
Russian Oil Sales to U.S. ‘on Steroids’ Amid Venezuela Sanctions (Bloomberg) Petroleum exports from Russia to the U.S. are growing rapidly as the supplier takes advantage of lost deliveries from sanctions-hit Venezuela and supply cuts by OPEC members.
Overnight markets
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.66% | 2 Year | 2.237% |
| 5 Year | 1.631% | 5 Year | 2.22% |
| 10 Year | 1.738% | 10 Year | 2.426% |
| 30 Year | 1.955% | 30 Year | 2.844% |
US Economic Data
| 10:00 AM | Existing Home Sales, Apr Survey 5.35m Prior 5.21m |
| Existing Home Sales MoM, Apr Survey 2.70% Prior -4.90% |
Canadian Economic Data
| 10:00 AM | Bloomberg Nanos Confidence, May 17 Survey — Prior 54.7 |
Disclosure and Disclaimer
The following sources of information have been, or may have been, used partially or in their entirety to compile the herein provided CTI Capital Securities Inc. (“CTI Capital”) ‘Morning Comments.’ CTI Capital believes these sources to be generally reliable, however, as said sources are varied and from third parties, CTI Capital cannot guarantee the accuracy or completeness of said information: Canadian Press (CP); Bloomberg News (BN); Wall Street Journal (WSJ); Stone & McCarthy Research Associates (SMRA); New York Times (NYT); Financial Times (FT); Market News International (MNI); Globe and Mail; Associated Press (AP); CNW Group (CNW); Reuters; Business News Network (BNN); Market Watch; and others.
Ivan Greenstein, Stephan Buu, Émile Bordeleau
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230